The Punt: Co-op knocked off its pedestal
Published 12/04/2014 | 02:30
IT'S fair to say some of us have developed a pretty jaundiced opinion of our banks.
Hard as it is to believe though, it could be worse. In the UK, the Co-op Group, and its banking arm, was long held up as a bastion of correctness and was seen by some, in the aftermath of the crash, as a model for prudent, risk-based lending. Indeed at one point, the British government looked like it would broker a deal for the Co-op Bank to take on more than 500 branches of the hobbled Lloyds Bank.
Well, it turns out the Co-op wasn't quite the brilliantly-run institution we believed. This time last year, the Lloyds sale fell through. In May, a £1.5bn black hole was found in its balance sheet and the bank's chairman, Paul Flowers, resigned.
Mr Flowers was then arrested in November after a newspaper expose allegedly showed him buying drugs and boasting about previous drug use.
Yesterday, the bank confirmed it lost £1.3bn last year and won't be profitable this year.
If that wasn't bad enough, a Co-op board member was suspended amid claims he was struck off as a chartered accountant some years ago.